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Macro-Economic impacts of post-2012 climate policies based on [1] Caps and Fences [2] Thesis: A Trade view on Climate Change Policies, A Multi-Region Multi-Sector.

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Presentation on theme: "Macro-Economic impacts of post-2012 climate policies based on [1] Caps and Fences [2] Thesis: A Trade view on Climate Change Policies, A Multi-Region Multi-Sector."— Presentation transcript:

1 Macro-Economic impacts of post-2012 climate policies based on [1] Caps and Fences [2] Thesis: A Trade view on Climate Change Policies, A Multi-Region Multi-Sector Approach Publications can also be found at: www.mnp.nl Email: jc.bollen@mnp.nlwww.mnp.nl Johannes Bollen

2 Costs on 2 0 Celsius compliance are Minimal when GLOBAL permit trading Costs increase with smaller coalitions CDM in post-2012 will Lower costs in non-global coalitions But danger of leakage –can be lowered through appropriate policy design

3 Global IET: Targets more stringent than emission reductions in EU No policy 2020 Emissions 1990 Annex I non Annex I Targets -30% Emissions Domestic Permit Imports Bron: MNP 2005

4 Costs minimal when global IET, and increase (!!) in non- global coalitions Global Macro-economic costs in 2020 (%NI) 0.0 0.5 1.0 1.5 2.0 0.00.20.60.8 Global Emission Reduction (TgCO2) Annex I Cases Global Cases EU unilateral Cases RA30-C UA30-C RG30 0 Celsius EU objective 0.4 -C -C 2 Bron: MNP 2005

5 CDM will lower the costs in non-global coalitions, but ……………… Macro-economic costs (%NI) -1,0 0,0 1,0 2,0 3,0 Annex I IET+ CDM EU-25 Netherlands non-Annex I World Trade price 125 € / t CO 2 Trade price 51 € / t CO 2 Bron: MNP 2005

6 CDM leads to strong leakages, but lowered through appropriate policy design Global IET A1 CDM CDM restricted Lower supply elasticity of coal Higher Substitution electricity and heat CDM-more sectors CDM price discrimination Trade price in € / t CO 2 0 10 20 30 40 0255075100125150 CDM Leakage rate Bron: MNP 2005


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